India’s inflation data for June and industrial production data for May are set to release tomorrow. According to a DBS Bank research report, the inflation is likely to have come in at 3 percent year-on-year. Consensus expectations are for 3.05 percent.
High-frequency food price pressures hint at stabilization after having risen for six months. Domestic fuel prices were also a bit lower in the month, which along with a seasonal pullback in the housing segment is expected to keep the headline in check, whilst the core rate coms to 4 percent, said DBS Bank.
Meanwhile, looking at the PMI trends and core industries output, the industrial production growth is likely to have slowed down to 2 percent year-on-year in May from April’s 3.4 percent. Weak production and manufacturing figures are greatly in sync with regional trends as protectionist trade policies linger.
“On policy, a mix of sub-target inflation and weak IIP numbers is likely to keep the RBI policy committee on the easing path, with a 25bp cut expected in August”, added DBS Bank.